Exhibit
10.1


 


ACTIVISION
BLIZZARD, INC.


 


AMENDED AND
RESTATED


2008
INCENTIVE PLAN


 


1.  Purpose. 
The purpose of the Amended and Restated Activision Blizzard, Inc.
2008 Incentive Plan is to attract and retain directors, officers and other
employees of and consultants to Activision Blizzard, Inc., a Delaware
corporation, and its Subsidiaries, and to provide to such persons incentives
and rewards for performance.


 


2.  Definitions.  As used in the Plan:


 


(a)                                  “Award” means a grant of a Stock Option,
SARs, Performance Shares, Performance Units or a Senior Executive Bonus or a
grant or sale of Restricted Shares, Restricted Share Units or an award
contemplated by Section 10.


 


(b)                                 “Base Price” means the price per share
specified in an Evidence of Award of a Freestanding SAR.


 


(c)                                  “Board” means the Board of Directors of the
Company.


 


(d)                                 “Code” means the Internal Revenue Code of
1986, as amended from time to time.


 


(e)                                  “Committee” means the Compensation Committee
of the Board or such other committee of the Board responsible for administering
the Plan pursuant to Section 11.


 


(f)                                    “Common Shares” means the shares of common
stock, par value $0.000001 per share, of the Company or any security into which
such Common Shares may be changed by reason of any transaction or event of the
type referred to in Section 12.


 


(g)                                 “Company” means Activision Blizzard, Inc.,
a Delaware corporation, and its successors.


 


(h)                                 “Covered Employee” means a Participant who
is, or is determined by the Committee to be likely to become, a “covered employee”
within the meaning of Section 162(m) of the Code (or any successor
provision).


 


(i)                                     “Date of Grant” means the date on which the
Committee determines the terms of an Award (including the number of Common
Shares to which it pertains, if any) or such later (but not earlier) date as
may be specified by the Committee as the date on which such Award becomes
effective.


 


(j)                                     “Deferral Period” means the period of time
during which Restricted Share Units are subject to deferral limitations, as
provided in Section 7.


 


(k)                                  “Director” means a member of the Board of
Directors of the Company.


 


(l)                                     “Effective Date” means the date of approval
of the Plan by the Company’s stockholders.


 


(m)                               “Evidence of Award” means an agreement,
certificate, resolution or other type or form of writing or other evidence
approved by the Committee that sets forth the terms and conditions of Awards.
An Evidence of Award may be in an electronic medium, may be limited to notation
on the books and records of the Company and, with the approval of the
Committee, need not be signed by a representative of the Company or a
Participant.


 


	
   

  	
  As amended and restated on December 17, 2009

  



 


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(n)                                 “Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder, as such law, rules and regulations may be amended from time to
time.


 


(o)                                 “Exercise Price” means the purchase price
per share payable on exercise of a Stock Option.


 


(p)                                 “Fiscal Year” means the fiscal year of the
Company.


 


(q)                                 “Freestanding SAR” means a SAR that is not
granted in tandem with a Stock Option.


 


(r)                                    “Incentive Stock Option” means a Stock
Option that is intended to qualify as an “incentive stock option” under Section 422
of the Code or any successor provision.


 


(s)                                  “Management Objectives” means the measurable
performance objective or objectives established pursuant to the Plan for
Participants who have received grants of Performance Shares or Performance
Units or, when so determined by the Committee, Stock Options, SARs, Restricted
Shares, Restricted Share Units, dividend credits and other awards pursuant to
the Plan. Management Objectives may be described in terms of Company-wide
objectives or objectives that are related to the performance of the individual
Participant or of a Subsidiary, division, department or function within the
Company or a Subsidiary. The Committee may provide, in connection with the
setting of the Management Objectives, that any evaluation of performance may include
or exclude certain items that may occur during any Fiscal Year, including,
without limitation, the following: (i) asset write downs; (ii) litigation
or claim judgments or settlements; (iii) the effect of changes in tax
laws, accounting principles or other laws or provisions affecting reported
results; (iv) any reorganization and restructuring programs; (v) extraordinary
nonrecurring items as described in Accounting Principles Board Opinion No. 30
and/or in management’s discussion and analysis of financial condition and
results of operations appearing in the Company’s Annual Report on Form 10-K
for the applicable year; (vi) acquisitions or divestitures; and (vii) foreign
exchange gains and losses. To the extent such inclusions or exclusions affect
Awards to Covered Employees, they will be prescribed in a form that meets the
requirements of Section 162(m) of the Code for deductibility. The
Management Objectives applicable to any Award to a Covered Employee will be
based on specified levels of, or relative peer company, performance in any one
or more of the following objectives, or any combination thereof, as determined
by the Committee in its sole discretion:


 


(A)                              Adjusted net
earnings


 


(B)                                Appreciation in
and/or maintenance of the price of Common Shares (or any other publicly-traded
securities of the Company), including, without limitation, comparisons with
various stock market indices


 


(C)                                Attainment of
strategic and operational initiatives


 


(D)                               Budget


 


(E)                                 Cash flow
(including, without limitation, free cash flow)


 


(F)                                 Cost of capital


 


(G)                                Cost reduction


 


(H)                               Earnings and
earnings growth (including, without limitation, earnings per share, earnings
before taxes, earnings before interest and taxes, and earnings before interest,
taxes, depreciation and amortization)


 


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(I)                                    Maintenance of
internal controls over financial reporting and corporate governance practices


 


(J)                                   Market share


 


(K)                               Market value
added


 


(L)                                 Net income


 


(M)                            Net sales


 


(N)                               Operating
profit and operating income


 


(O)                               Pretax income
before allocation of corporate overhead and bonus


 


(P)                                 Quality


 


(Q)                               Recruitment and
development of associates


 


(R)                                Reductions in
costs


 


(S)                                 Return on
assets and return on net assets


 


(T)                                Return on
equity


 


(U)                               Return on invested
capital


 


(V)                                Sales and sales
growth


 


(W)                           Successful
acquisition/divestiture


 


(X)                               Total
stockholder return and improvement of stockholder return


 


If the Committee determines that a change in
the business, operations, corporate structure or capital structure of the
Company, or the manner in which it conducts its business, or other events or
circumstances, render previously established Management Objectives unsuitable,
the Committee may in its discretion modify such Management Objectives or the
related levels of achievement, in whole or in part, as the Committee deems
appropriate and equitable, except in the case of a Covered Employee where such
action would result in the loss of the otherwise available exemption of the
Award under Section 162(m) of the Code. In such case, the Committee
will not make any modification of the Management Objectives or the level or
levels of achievement with respect to such Covered Employee.


 


(t)                                    “Market Value per Share” means, as of any
particular date, (i) one hundred percent (100%) of the closing price per
Common Share as reported on the principal securities exchange, association or
quotation system on which Common Shares are then listed or quoted, or (ii) if
clause (i) does not apply, the fair market value of a Common Share as
determined by the Committee.


 


(u)                                 “Optionee” means the optionee named in an
Evidence of Award evidencing an outstanding Stock Option.


 


(v)                                 “Participant” means a person who is selected
by the Committee to receive benefits under the Plan and who is at the time an
officer, employee, consultant, advisor or director of the Company or of any
Subsidiary.


 


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(w)                               “Performance Period” means, in respect of a
Performance Share, Performance Unit or Senior Executive Plan Bonus, a period of
time established pursuant to Section 8 or Section 9 within which the
Management Objectives relating to such Award are to be achieved. The
Performance Period for a Senior Executive Plan Bonus will be the Fiscal Year
and, unless otherwise expressly provided in the Plan, the Performance Period
for all other Awards will be established by the Committee at the time of the
Award.


 


(x)                                   “Performance Share” means a bookkeeping
entry that records the equivalent of one Common Share awarded pursuant to Section 8.


 


(y)                                 “Performance Unit” means a bookkeeping entry
awarded pursuant to Section 8 that records a unit equivalent to $1.00 or
such other value as is determined by the Committee.


 


(z)                                   “Plan” means this Amended and Restated
Activision Blizzard, Inc. 2008 Incentive Plan, as may be amended from time
to time.


 


(aa)                            “Prior Plan” means any of the following: (i) Activision, Inc.
1998 Incentive Plan, as amended, (ii) Activision, Inc. 1999 Incentive
Plan, as amended, (iii) Activision, Inc. 2001 Incentive Plan, as
amended, (iv) Activision, Inc. 2002 Incentive Plan, as amended, (v) Activision, Inc.
2002 Executive Incentive Plan, as amended, (vi) Activision, Inc. 2002
Studio Employee Retention Incentive Plan, as amended, (vii) Activision, Inc.
2003 Incentive Plan, as amended, and (viii) Activision, Inc. 2007
Incentive Plan.


 


(bb)                          “Related SAR” means a SAR granted pursuant
to Section 5 that is granted in tandem with a Stock Option.


 


(cc)                            “Restricted Shares” means Common Shares
granted or sold pursuant to Section 6 as to which neither the substantial
risk of forfeiture nor the prohibition on transfers has expired.


 


(dd)                          “Restricted Share Unit” means an award
granted pursuant to Section 7 of the right to receive Common Shares or
cash at the end of a specified period.


 


(ee)                            “SAR” or “Share
Appreciation Right” means a right granted pursuant to Section 5
to receive a percentage of the Spread upon exercise, and includes both
Freestanding SARs and Related SARs.


 


(ff)                                “Senior Executive Plan Bonus” means an award
of annual incentive compensation made pursuant to and subject to the conditions
set forth in Section 9.


 


(gg)                          “Spread” means the excess of the Market
Value per Share on the date when a SAR is exercised over the Exercise Price or
Base Price provided for in the related Stock Option or Freestanding SAR,
respectively.


 


(hh)                          “Stock Option” means the right to purchase
Common Shares upon exercise of an option granted pursuant to Section 4.


 


(ii)                                  “Subsidiary” means a corporation, company or
other entity (i) at least 50 percent of whose outstanding shares or
securities (representing the right to vote for the election of directors or
other managing authority) are, or (ii) which does not have outstanding
shares or securities (as may be the case in a partnership, joint venture or
unincorporated association), but at least 50 percent of whose ownership
interests representing the right generally to make decisions for such other
entity are, now or hereafter, owned or controlled, directly or indirectly, by
the Company, except that for purposes of determining whether any person may be
a Participant for purposes of any grant of Incentive Stock Options,
“Subsidiary” means any corporation in which at the time the Company owns or
controls, directly or indirectly, at least 50 percent of the total
combined voting power represented by all classes of stock issued by such
corporation.


 


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(jj)                                  “2007 Plan” means the Activision, Inc.
2007 Incentive Plan.


 


3.  Shares Available Under the Plan.


 


(a)                                  Subject to
adjustment as provided in Section 12, the number of Common Shares that may
be issued or transferred (i) upon the exercise of Stock Options, (ii) in
payment of SARs, (iii) as Restricted Shares, (iv) in payment of
Restricted Share Units, (v) in payment of Performance Shares or
Performance Units, (vi) in payment of Senior Executive Bonuses, (vii) as
or pursuant to Awards contemplated by Section 10, or (viii) in
payment of dividend equivalents paid with respect to Awards made under the Plan
will not exceed in the aggregate 44,000,000 Common Shares, plus the number of Common Shares that were
reserved for issuance under the Prior Plans, other than the 2007 Plan, that
were not subject to outstanding awards on September 27, 2007, plus the number of Common Shares subject
to outstanding awards under the Prior Plans, other than the 2007 Plan, on September 27,
2007 that subsequently became available for issuance pursuant to the terms of
the 2007 Plan, plus the number of
shares subject to awards made under the 2007 Plan that subsequently became
available for issuance pursuant to the terms of the 2007 Plan, minus the number of shares subject to
awards issued under the 2007 Plan since September 27, 2007, which maximum
number will be increased by the following: (A) the number of shares
relating to awards outstanding under any Prior Plan as of the Effective Date
that (1) expire, or are forfeited, terminated or cancelled, without the
issuance of shares, (2) are settled in cash in lieu of shares, or (3) are
exchanged prior to the issuance of Common Shares, for awards not involving
Common Shares; and (B) if the exercise price of any stock option
outstanding under any Prior Plan as of the Effective Date is, or the tax
withholding requirements with respect to any award outstanding under any Prior
Plan as of the Effective Date are, satisfied by withholding shares otherwise
then deliverable in respect of the award or the actual or constructive transfer
to the Company of shares already owned, the number of shares equal to the withheld
or transferred shares.


 


(b)                                 Under the Plan,
(i) if all or any portion of an Award expires, or is forfeited, terminated
or cancelled, without the issuance of Common Shares, or is settled in cash in
lieu of Common Shares, or is exchanged with the Committee’s permission, prior
to the issuance of Common Shares, for an Award not involving Common Shares, the
number of Common Shares expired, forfeited, terminated or cancelled, or settled
or exchanged, as the case may be, will again be available for issuance or
transfer under the Plan; (ii) if the Exercise Price of any Stock Option
granted under the Plan is, or the tax withholding requirements with respect to
any Award granted under the Plan are, satisfied through the withholding by the
Company of shares otherwise then deliverable in respect of such Award or actual
or constructive transfer to the Company of shares already owned, a number of
shares equal to such withheld or transferred shares will again be available for
issuance or transfer under the Plan; and (iii) if a SAR is exercised and
settled in Common Shares, a number of shares equal to the difference between
the total number of shares for which the SAR was exercised and the number of
shares actually issued or transferred will again be available for issuance or
transfer under the Plan, with the result being that only the number of Common
Shares actually issued or transferred upon exercise of the SAR are counted
against the maximum number of Common Shares available for issuance or transfer
under the Plan. Shares utilized under the Plan may be shares of original
issuance or treasury shares or a combination of the foregoing.


 


(c)                                  Notwithstanding
anything in the Plan to the contrary, and subject to adjustment as provided in Section 12:


 


(i)                                     The number of
Common Shares actually issued or transferred by the Company upon the exercise
of Incentive Stock Options will not exceed that number of shares equal to the
sum of 14,000,000 and the number of shares available for grant under the 2007
Plan on September 24, 2008.


 


(ii)                                  The number of
Common Shares actually issued or transferred by the Company as or pursuant to
Awards other than Options or SARs will not exceed 22,000,000 in the aggregate,
including no more than 8,800,000 in the aggregate as or pursuant to Awards granted
under Section 10.


 


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(iii)                               The number of
shares issuable or transferable in respect of Stock Options and SARs granted to
any one Participant in a single Fiscal Year may not exceed 4,000,000 in the
aggregate.


 


(iv)                              The number of (A) Restricted
Shares granted to any one Participant in a single Fiscal Year and (B) Common
Shares issuable or transferable in respect of Restricted Share Units granted to
such Participant in such Fiscal Year, may not exceed 2,000,000 in the
aggregate.


 


(v)                                 The number of
Performance Shares granted to any one Participant in a single Fiscal Year may
not exceed 3,000,000 in the aggregate.


 


(vi)                              The value of
Performance Units granted to any one Participant in a single Fiscal Year may not
exceed $2,000,000 in the aggregate (with the value of any such award to be
determined as of the date of such award).


 


(vii)                           The amount of
any Senior Executive Plan Bonuses paid to any one Participant for any single
Fiscal Year may not exceed $6,000,000 in the aggregate.


 


(viii)                        The number of
Common Shares issuable or transferable in respect of Awards contemplated by Section 10
granted to any one Participant in a single Fiscal Year may not exceed 3,000,000
in the aggregate. The value of any Awards contemplated by Section 10 that
do not involve the issuance or transfer of Common Shares granted to any one
Participant in a single Fiscal Year may not exceed $2,000,000 in the aggregate
(with the value of any such award to be determined as of the date of such award).


 


(d)                                 If a
Participant has elected to give up the right to receive compensation in
exchange for Common Shares based on fair market value, such Common Shares will
not count against the number of shares available in Section 3(a) above.


 


4.  Stock Options.  The Committee may, from time to time and upon
such terms and conditions as it may determine, authorize the grant to
Participants of options to purchase Common Shares. Each such grant may utilize
any or all of the authorizations, and will be subject to all of the
requirements, contained in the following provisions:


 


(a)                                  Each grant will
specify the number of Common Shares to which it pertains.


 


(b)                                 Each grant will
specify an Exercise Price per share, which may not be less than the Market
Value per Share on the Date of Grant.


 


(c)                                  Each grant may
specify that the Exercise Price will be payable (i) by bank check or
certified check or by wire transfer of immediately available funds, (ii) through
the delivery of irrevocable instructions, in form acceptable to the Company, to
a brokerage firm approved by the Optionee to sell some or all of the Common
Shares being purchased upon such exercise and to thereafter deliver promptly to
the Company from the proceeds of such sale an amount in cash equal to the
aggregate Exercise Price of the Common Shares being purchased, (iii) by a
combination of such methods of payment, or (iv) by such other methods as
may be approved by the Committee.


 


(d)                                 Successive
grants may be made to the same Participant whether or not any Stock Options
previously granted to such Participant remain unexercised.


 


(e)                                  Each grant will
specify the period or periods of continuous employment or other service by the
Optionee with the Company or a Subsidiary that is necessary before the Stock
Options or installments thereof will become exercisable. A grant of Stock
Options may provide for the accelerated vesting and exercisability of all or a
portion of such Stock Options in the event of the retirement, death, 


 


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disability or other termination of the
Optionee’s service or a change of control of the Company or a Subsidiary (or
other similar transaction or event).


 


(f)                                    A grant of
Stock Options may specify Management Objectives or other performance criteria
that must be achieved as a condition to the exercise of such rights or that may
result in the accelerated exercisability of such rights.


 


(g)                                 Stock Options
may be (i) options that are intended to qualify under the Code as
Incentive Stock Options, (ii) options that are not intended to so qualify,
or (iii) combinations of the foregoing.


 


(h)                                 The exercise of
a Stock Option will result in the cancellation on a share- for-share basis of
any Related SAR authorized under Section 5.


 


(i)                                     No Stock Option
will be exercisable more than 10 years from the Date of Grant.


 


(j)                                     Each grant of
Stock Options will be evidenced by an Evidence of Award. Each Evidence of Award
will be subject to the Plan and will contain such terms and provisions,
consistent with the Plan, as the Committee may approve from time to time. In
addition, notice of each grant of Stock Options will be given to the Optionee
no more than one week after the Date of Grant.


 


(k)                                  Each Optionee
is responsible for complying with all laws and regulations applicable to
recipients and holders of Stock Options, including any applicable federal or
state securities laws, and any Company policy or procedure that pertains to the
trading of the Company’s securities. The Company will adopt or maintain
policies and procedures to notify Optionees of their obligations under such
laws, regulations, policies and procedures and will monitor Optionees’
compliance therewith.


 


5.  SARs. 
The Committee may also authorize the grant to any Optionee of Related
SARs in respect of Stock Options granted hereunder and the grant to any
Participant of Freestanding SARs. A Related SAR will be a right of the
Optionee, exercisable by surrender of the related Stock Option, to receive from
the Company an amount determined by the Committee, which will be expressed as a
percentage of the Spread (not exceeding 100 percent) at the time of
exercise. Related SARs must be granted concurrently with the related Stock
Option. A Freestanding SAR will be a right of the Participant to receive from
the Company an amount determined by the Committee, which will be expressed as a
percentage of the Spread (not exceeding 100 percent) at the time of
exercise. Each grant of SARs may utilize any or all of the authorizations, and
will be subject to all of the requirements, contained in the following
provisions:


 


(a)                                  Each grant will
specify the number of Common Shares to which it pertains.


 


(b)                                 Each grant of
Freestanding SARs will specify the Base Price, which may not be less than the
Market Value per Share on the Date of Grant.


 


(c)                                  Upon exercise,
each SAR will be payable in Common Shares having an aggregate Market Value per
Share equal to the Spread (or the designated percentage of the Spread).


 


(d)                                 A grant may
specify that the amount payable on exercise of a SAR may not exceed a maximum
specified by the Committee at the Date of Grant.


 


(e)                                  A grant may
specify waiting periods before exercise and permissible exercise dates or
periods.


 


(f)                                    A grant may
specify that the exercisability of a SAR may be conditioned on, or may be
accelerated in whole or in part in the event of, the retirement, death,
disability or other termination of the Participant’s service or a change of
control of the Company or a Subsidiary (or other similar transaction or event).


 


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(g)                                 A grant of SARs
may specify Management Objectives or other performance criteria that must be
achieved as a condition of the exercise of such SARs or that may result in the
accelerated exercisability of such SARs.


 


(h)                                 Each grant of
SARs will be evidenced by an Evidence of Award, which Evidence of Award will
describe such SARs, identify the related Stock Options (if applicable), and
contain such other terms and provisions, consistent with the Plan, as the
Committee may approve from time to time.


 


(i)                                     A grant of
Related SARs will provide that such Related SARs may be exercised only at a
time when the related Stock Option is also exercisable and at a time when the
Spread is positive, and by surrender of the related Stock Option for cancellation.
Successive grants of Related SARs may be made to the same Participant
regardless of whether any Related SARs previously granted to the Participant
remain unexercised.


 


(j)                                     Successive
grants of Freestanding SARs may be made to the same Participant regardless of
whether any Freestanding SARs previously granted to the Participant remain
unexercised.


 


(k)                                  No Freestanding
SAR granted under the Plan may be exercised more than 10 years from the
Date of Grant.


 


6.  Restricted Shares.  The Committee may also authorize the grant or
sale of Restricted Shares to Participants. Each such grant or sale will
constitute an immediate transfer of the ownership of Common Shares to the
Participant in consideration of the performance of services or other benefit to
the Company, entitling such Participant to voting, dividend and other ownership
rights, but subject to the substantial risk of forfeiture (within the meaning
of Section 83 of the Code) and restrictions on transfer hereinafter
referred to. Each such grant or sale may utilize any or all of the
authorizations, and will be subject to all of the requirements, contained in
the following provisions:


 


(a)                                  Each grant will
specify the number of Common Shares to which it pertains.


 


(b)                                 Each such grant
or sale may be made without additional consideration or in consideration of a
payment by the Participant that is less than the Market Value per Share at the
Date of Grant.


 


(c)                                  Each such grant
or sale will specify the period or periods of continuous employment or other
service by the Participant with the Company or a Subsidiary (or other risk of
forfeiture) that must be satisfied before the restrictions described in Section 6(c) will
lapse and the Restricted Shares will become vested, and/or may provide that all
or a portion of the restrictions on the Restricted Shares will lapse upon the
achievement of Management Objectives or other performance criteria (as provided
in Section 6(d) below).


 


(d)                                 Each such grant
or sale will provide that, during the period for which the risk of forfeiture
continues, the transferability of the Restricted Shares will be prohibited or
restricted in the manner and to the extent prescribed by the Committee at the
Date of Grant (which restrictions may include, without limitation, rights of
repurchase or first refusal in the Company or provisions subjecting the
Restricted Shares to a continuing substantial risk of forfeiture in the hands
of any transferee).


 


(e)                                  A grant of
Restricted Shares may specify Management Objectives or other performance
criteria that, if achieved, will result in the lapse or early lapse of the
restrictions applicable to all or a portion of such Restricted Shares. Each
grant may specify in respect of such Management Objectives or other performance
criteria a minimum acceptable level of achievement and may set forth a formula
for determining the number of Restricted Shares with respect to which
restrictions will lapse if performance is at or above the minimum level, but
falls short of maximum achievement of the specified Management Objectives or
criteria.


 


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(f)                                    Notwithstanding
anything to the contrary contained in the Plan, a grant or sale of Restricted
Shares may provide for the acceleration in whole or in part of the lapse of the
restrictions on the Restricted Shares in the event of the retirement, death, disability
or other termination of the Participant’s service or a change of control of the
Company or a Subsidiary (or other similar transaction or event).


 


(g)                                 A grant or sale
of Restricted Shares may require that any or all dividends or other distributions
paid thereon during the period of such restrictions be automatically deferred
and reinvested in additional shares of Restricted Shares, which may be subject
to the same restrictions as the underlying Award.


 


(h)                                 Each grant or
sale of Restricted Shares will be evidenced by an Evidence of Award and will
contain such terms and provisions, consistent with the Plan, as the Committee
may approve. Unless otherwise directed by the Committee, all Restricted Shares
will be held in custody by the Company or its transfer agent and registrar
until all restrictions thereon have lapsed.


 


7.  Restricted Share Units.  The Committee may also authorize the grant or
sale of Restricted Share Units to Participants. Each such grant or sale will
constitute the agreement by the Company to deliver Common Shares or cash to the
Participant in the future in consideration of the performance of services or
other benefit to the Company, but subject to the fulfillment of such conditions
(which may include the achievement of Management Objectives or other
performance criteria) during the Deferral Period as the Committee may specify.
Each such grant or sale may utilize any or all of the authorizations, and will
be subject to all of the requirements, contained in the following provisions:


 


(a)                                  Each grant will
specify the number of Common Shares to which it pertains.


 


(b)                                 Each grant may
specify in respect of such Management Objectives or other performance criteria
a minimum acceptable level of achievement and may set forth a formula for
determining the number of Restricted Share Units which will vest if performance
is at or above the minimum level, but falls short of maximum achievement of the
specified Management Objectives or criteria.


 


(c)                                  Each such grant
or sale may be made without additional consideration or in consideration of a
payment by such Participant that is less than the Market Value per Share at the
Date of Grant.


 


(d)                                 Notwithstanding
anything to the contrary contained in the Plan, a grant or sale may provide for
the accelerated vesting of Restricted Share Units and the lapse or other
modification of the Deferral Period in whole or in part in the event of the
retirement, death, disability or other termination of the Participant’s service
or a change of control of the Company or a Subsidiary (or other similar
transaction or event).


 


(e)                                  During the
Deferral Period, the Participant will have no rights of ownership in the
Restricted Share Units and will have no right to vote Common Shares underlying
the Restricted Share Units, but an Evidence of Award may authorize the payment
of dividend equivalents on such Restricted Share Units on either a current or
deferred or contingent basis, either in cash or in Common Shares.


 


(f)                                    Each grant or
sale will specify the time and manner of payment of the Restricted Share Units
that have been earned. A grant or sale may specify that the amount payable with
respect thereto may be paid by the Company in cash, in Common Shares or in any
combination thereof and may either grant to the Participant or retain in the
Committee the right to elect among those alternatives.


 


(g)                                 Each grant or
sale of Restricted Share Units will be evidenced by an Evidence of Award and
will contain such terms and provisions, consistent with the Plan, as the
Committee may approve from time to time.


 


8.  Performance Shares and Performance Units.  The Committee may also authorize the grant of
Performance Shares and Performance Units that will become payable to a
Participant upon achievement of specified 


 


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Management Objectives or other performance criteria during the
Performance Period. Each such grant may utilize any or all of the
authorizations, and will be subject to all of the requirements, contained in
the following provisions:


 


(a)                                  Each grant will
specify the number of Performance Shares or Performance Units to which it
pertains, which number may be subject to adjustment to reflect changes in
compensation or other factors; provided,
however, that no such adjustment
will be made in the case of a Covered Employee where such action would result
in the loss of the otherwise available exemption of the Award under Section 162(m) of
the Code.


 


(b)                                 The Performance
Period with respect to each Performance Share or Performance Unit will be such
period of time as will be determined by the Committee at the Date of Grant,
which may be subject to earlier lapse or other modification in the event of the
retirement, death, disability or other termination of the Participant’s service
or a change of control of the Company or a Subsidiary (or other similar
transaction or event).


 


(c)                                  A grant of
Performance Shares or Performance Units will specify Management Objectives or
other performance criteria which, if achieved, will result in payment or early
payment of the Award, and each grant may specify in respect of such specified
Management Objectives or other performance criteria a level or levels of
achievement and will set forth a formula for determining the number of
Performance Shares or Performance Units that will be earned if performance is
at or above the minimum level or levels, but falls short of maximum achievement
of the specified Management Objectives or criteria.


 


(d)                                 Each grant will
specify the time and manner of payment of Performance Shares or Performance
Units that have been earned. A grant may specify that the amount payable with
respect thereto may be paid by the Company in cash, in Common Shares or in any
combination thereof and may either grant to the Participant or retain in the
Committee the right to elect among those alternatives.


 


(e)                                  A grant of
Performance Shares may specify that the amount payable with respect thereto may
not exceed a maximum specified by the Committee at the Date of Grant. A grant
of Performance Units may specify that the amount payable or the number of
Common Shares issued with respect thereto may not exceed maximums specified by
the Committee at the Date of Grant.


 


(f)                                    The Committee
may, at the Date of Grant of Performance Shares, provide for the payment of
dividend equivalents to the holder thereof on either a current or deferred or
contingent basis, either in cash or in Common Shares.


 


(g)                                 Each grant of
Performance Shares or Performance Units will be evidenced by an Evidence of
Award and will contain such other terms and provisions, consistent with the
Plan, as the Committee may approve from time to time.


 


9.  Senior Executive Plan Bonuses.  The Committee may from time to time authorize
the payment of annual incentive compensation to a Participant who is a Covered
Employee, which incentive compensation will become payable upon achievement of
specified Management Objectives. Subject to Section 3(b)(vii), Senior
Executive Plan Bonuses will be payable upon such terms and conditions as the
Committee may determine in accordance with the following provisions:


 


(a)                                  No later than
90 days after the first day of the Fiscal Year, the Committee will specify
the Management Objectives that, if achieved, will result in the payment of a
Senior Executive Plan Bonus for such Fiscal Year.


 


(b)                                 Following the
close of the Fiscal Year, the Committee will certify in writing whether the
specified Management Objectives have been achieved. Approved minutes of a
meeting of the Committee at which such certification is made will be treated as
written certification for this purpose. The Committee will also specify the
time and manner of payment of a Senior Executive Plan Bonus which becomes 


 


10

















 


payable, which payment may be made in (i) cash,
(ii) Common Shares having an aggregate Market Value per Share equal to the
aggregate value of the Senior Executive Plan Bonus which has become payable, or
(iii) any combination thereof, as determined by the Committee in its
discretion at the time of payment.


 


(c)                                  The Committee
may provide that, if a change in control of the Company occurs during a
Performance Period, the Senior Executive Plan Bonus payable to each Participant
for the Performance Period will be determined at the highest level of
achievement of the Management Objectives, without regard to actual performance
and without proration for less than a full Performance Period. In such event,
the Senior Executive Plan Bonus will be paid at such time following the change
in control as the Committee determines in its discretion, but in no event later
than 30 days after the date of an event which results in a change in
control.


 


(d)                                 Each grant may
be evidenced by an Evidence of Award, which will contain such terms and
provisions as the Committee may determine consistent with the Plan, including
without limitation provisions relating to the Participant’s termination of
employment by reason of retirement, death, disability or otherwise.


 


10.  Other Awards.


 


(a)                                  In addition to
Stock Options, SARs, Performance Shares, Performance Units, Restricted Shares,
Restricted Share Units and Senior Executive Plan Bonuses, the Committee may,
subject to limitations under applicable law, make other Awards (i) that
may be denominated or payable in, valued in whole or in part by reference to,
or otherwise based on, or related to, Common Shares or factors that may
influence the value of such shares, including, without limitation, convertible
or exchangeable debt securities, other rights convertible or exchangeable into
Common Shares, purchase rights for Common Shares, (ii) with value and
payment contingent upon performance of the Company or specified Subsidiaries or
other business units thereof or any other factors designated by the Committee,
or (iii) valued by reference to the book value of Common Shares or the
value of securities of, or the performance of specified Subsidiaries or other
business units of the Company. The Committee will determine the terms and
conditions of such Awards. Common Shares delivered pursuant to an Award in the
nature of a purchase right granted under this Section 10 will be purchased
for such consideration, paid for at such time, by such methods, and in such
forms, including, without limitation, cash, Common Shares, other Awards, notes
or other property, as the Committee determines.


 


(b)                                 Cash awards, as
an element of or a supplement to any other Award made under the Plan, may also
be made pursuant to this Section 10.


 


(c)                                  The Committee
may grant Common Shares as a bonus, or may make other Awards in lieu of obligations
of the Company or a Subsidiary to pay cash or deliver other property under the
Plan or under other plans or compensatory arrangements, subject to such terms
as are determined by the Committee from time to time.


 


11.  Administration of the Plan.


 


(a)                                  The Plan will
be administered by the Committee. The composition of the Committee will comply
with applicable independence requirements under the rules and regulations
of any securities exchange, association or quotation system on which Common
Shares are then listed or quoted, and the Board will also consider the
advisability of appointing to the Committee members who satisfy the
requirements of (i) the definition of the term “non-employee director”
used Rule 16b-3 promulgated under the Exchange Act and (ii) the
definition of the term “outside director” used in Section 162(m) of
the Code.


 


(b)                                 The Committee
may from time to time delegate all or any part of its authority under the Plan
to a subcommittee of the Committee or to any other committee of the Board or a
subcommittee thereof. To the extent of any such delegation, references in the
Plan to the Committee will be deemed to be references to such committee or
subcommittee.


 


11

















 


(c)                                  Notwithstanding
any other provision of the Plan, any Award to a member of the Committee must be
approved by the Board to be effective.


 


(d)                                 The Committee
will have sole discretion to (i) interpret any provision of the Plan or an
Evidence of Award, (ii) make any determination necessary or advisable for
the administration of the Plan and Awards hereunder, and (iii) waive any
condition or right of the Company under an Award or discontinue or terminate an
Evidence of Award. Without intending to limit the generality or effect of the
foregoing, any decision or determination made by the Committee with respect to
the Plan or an Award, including whether to grant or withhold any required
consent, will be made by the Committee in its sole and absolute discretion,
subject to the terms of the Plan. The interpretation and construction by the
Committee of any provision of the Plan or of any Evidence of Award and any
determination by the Committee pursuant to any provision of the Plan or of any
such Evidence of Award will be final and conclusive.


 


(e)                                  The Committee
may delegate to one or more of its members or to one or more officers of the
Company, or to one or more agents or advisors, such administrative duties or
powers as it may deem advisable, and the Committee, or any person to whom
duties or powers have been so delegated, may employ one or more persons to
render advice with respect to any responsibility the Committee or such person
may have under the Plan. Without limiting the foregoing and subject to
applicable law, the Committee may, by resolution, authorize one or more
officers of the Company to do one or both of the following on the same basis as
the Committee: (i) designate employees to be recipients of Awards under
the Plan; and (ii) determine the size of any such Awards; provided, however,
that (A) the Committee will not delegate such responsibilities to any such
officer for Awards to an executive officer or any person subject to Section 162(m) of
the Code; (B) the resolution providing for such authorization sets forth
the total number of Common Shares such officer(s) may grant; and (C) the
officer(s) will report periodically to the Committee regarding the nature
and scope of the Awards made pursuant to the authority delegated.


 


12.  Adjustments.  The Committee will make or provide for such adjustments
in the number of Common Shares authorized under Section 3, in the number
of Common Shares covered by outstanding Awards, in the Exercise Price of
outstanding Stock Options and any amounts payable for Common Shares under other
outstanding Awards, in the Base Price of outstanding SARs, and in the kind of
shares covered thereby, as is equitably required to prevent dilution or
enlargement of the rights of Participants or Optionees that otherwise would
result from (a) any stock dividend, extraordinary dividend, stock split,
combination of shares, recapitalization or other change in the capital
structure of the Company, or (b) any change of control, merger,
consolidation, spin-off, split- off, spin-out, split-up, reorganization,
partial or complete liquidation or other distribution of assets, or issuance of
rights or warrants to purchase securities, or (c) any other corporate
transaction or event having an effect similar to any of the foregoing.
Moreover, in the event of any such transaction or event, the Committee, in its
discretion, may provide in substitution for any or all outstanding Awards under
the Plan such alternative consideration (including, without limitation, cash),
if any, as it may determine to be equitable in the circumstances and may require
in connection therewith the surrender of all Awards so replaced. The Committee
will also make or provide for such adjustments in the numbers of shares
specified in Section 3(c) as the Committee in its sole discretion,
exercised in good faith, may determine is appropriate to reflect any
transaction or event described in this Section 12; provided,
however, that any such adjustment to the
numbers specified in Sections 3(c)(i) and 3(c)(ii) will be made
only if and to the extent that (i) such adjustment would not cause any
option intended to qualify as an Incentive Stock Option to fail to so qualify
and (ii) such adjustment would not result in negative tax consequences
under Section 409A of the Code. Without limiting the generality of the
foregoing, in the event that the Company issues warrants or other rights to
acquire Common Shares on a pro rata basis to all stockholders, the Committee
will make such adjustments in the number of Common Shares authorized under the
Plan and in the limits contained herein as it may deem to be equitable,
including, without limitation, proportionately increasing the number of
authorized Common Shares or any such limit.


 


13.  Non U.S. Participants.  In order to facilitate the making of any
grant or combination of grants under the Plan, the Committee may provide for
such special terms for Awards to Participants who are foreign nationals or who
are employed by the Company or any Subsidiary outside of the United States of
America or who provide services to the Company under an agreement with a
foreign nation or agency, as the Committee may consider necessary or
appropriate to accommodate differences in local law, tax policy or custom.
Moreover, the Committee may approve such supplements to or amendments,
restatements or alternative versions of the Plan (including, 


 


12

















 


without limitation, sub-plans) as it may consider necessary or
appropriate for such purposes, without thereby affecting the terms of the Plan
as in effect for any other purpose, and the Secretary or other appropriate
officer of the Company may certify any such document as having been approved
and adopted in the same manner as the Plan. No such special terms, supplements,
amendments or restatements, however, will include any provisions that are
inconsistent with the terms of the Plan as then in effect unless the Plan could
have been amended to eliminate such inconsistency without further approval by
the stockholders of the Company.


 


14.  Transferability.


 


(a)                                  Except as
provided below or as otherwise determined by the Committee, (i) no Award
will be transferable by a Participant except by will or the laws of descent and
distribution and (ii) Stock Options and SARs will be exercisable during
the Participant’s lifetime only by the Participant or, in the event of the
Participant’s legal incapacity to do so, by the Participant’s guardian or legal
representative acting on behalf of the Participant in a fiduciary capacity
under state law and/or court supervision. With the consent of the Company,
which may be granted or withheld in its sole and absolute discretion, a
Participant may transfer an Award for estate planning purposes or pursuant to a
domestic relations order; provided that such transferee will be bound by and
subject to all of the terms and conditions of the Plan and the Evidence of
Award relating to the Award and executes an agreement satisfactory to the
Company evidencing such obligations; and provided
further that such Participant will remain bound by the terms and
conditions of the Plan. Notwithstanding the foregoing, no Stock Option that is
intended to be an Incentive Stock Option or any Related SAR granted in tandem
therewith may be transferred.


 


(b)                                 The Committee
may specify at the Date of Grant that part or all of the Common Shares that are
(i) to be issued or transferred by the Company upon the exercise of Stock
Options or SARs, upon the termination of the Deferral Period applicable to
Restricted Share Units or upon payment under any grant of Performance Shares,
Performance Units or a Senior Executive Plan Bonus or (ii) no longer
subject to the substantial risk of forfeiture and restrictions on transfer
referred to in Section 6, will be subject to further restrictions on
transfer.


 


15.  Withholding Taxes.  To the extent that the Company or a
Subsidiary is required to withhold federal, state, local or foreign taxes in
connection with any payment made or benefit realized by a Participant or other
person under the Plan, and the amounts available to the Company or Subsidiary for
such withholding are insufficient, it will be a condition to the receipt of
such payment or the realization of such benefit that the Participant or such
other person make arrangements satisfactory to the Company for payment of the
balance of such taxes required to be withheld, which arrangements (in the
discretion of the Committee) may include relinquishment of a portion of such
benefit.


 


16.  Compliance with Section 409A of the Code.  To the extent applicable, it is intended that
the Plan and any Awards hereunder comply with the provisions of Section 409A
of the Code. The Plan and any Awards hereunder will be administrated in a
manner consistent with this intent, and any provision that would cause the Plan
or any Award to fail to satisfy Section 409A of the Code will have no
force and effect until amended to comply with Section 409A of the Code
(which amendment may be retroactive to the extent permitted by Section 409A
of the Code and may be made by the Company without the consent of
Participants). Any reference in the Plan to Section 409A of the Code will
also include any proposed, temporary or final regulations, or any other
guidance, promulgated by the U.S. Department of the Treasury or the Internal
Revenue Service.


 


17.  Amendments.


 


(a)                                  The Committee
may at any time and from time to time amend or suspend the Plan in whole or in
part; provided, however, that, if an amendment must be
approved by the stockholders of the Company in order to comply with applicable
legal requirements or the requirements of the principal securities exchange,
association or quotation system on which the Common Shares are then listed or
quoted, then such amendment will be subject to stockholder approval and will
not be effective unless and until such approval has been obtained. Without
intending to limit the generality or effect of the foregoing, if an amendment
to the Plan would increase the number of Common Shares that may be issued or
transferred 


 


13

















 


upon the exercise of Incentive Stock Options,
then such amendment will be subject to stockholder approval and will not be
effective unless and until such approval has been obtained.


 


(b)                                 The Committee
will not, without the further approval of the stockholders of the Company,
authorize the amendment of any outstanding Stock Option or SAR to reduce the
Exercise Price or Base Price. Furthermore, no Stock Option or SAR will be
cancelled and replaced with Awards having a lower Exercise Price or Base Price
without further approval of the stockholders of the Company. This Section 17(b) is
intended to prohibit the repricing of “underwater” Stock Options and SARs and
will not be construed to prohibit the adjustments provided for in Section 12.


 


(c)                                  Subject to Section 17(b) hereof,
the Committee may amend the terms of any Award under the Plan prospectively or
retroactively, except in the case of a Covered Employee where such action would
result in the loss of the otherwise available exemption of the Award under Section 162(m) of
the Code. In such case, the Committee will not make any modification of the
Management Objectives or the level or levels of achievement with respect to
such Covered Employee. Subject to Section 12, no amendment to any Award
may materially and adversely affect the rights of any Participant taken as a
whole without his or her consent.


 


(d)                                 If permitted by
Section 409A of the Code, in case of termination of employment by reason
of the death, disability or normal or early retirement, or in the case of
unforeseeable emergency or other special circumstances, of a Participant who
holds a Stock Option or SAR not immediately exercisable in full, or any
Restricted Shares as to which the risk of forfeiture or the prohibition or
restriction on transfer has not lapsed, or any Restricted Share Units as to
which the Deferral Period has not been completed, or any Performance Shares or
Performance Units which have not been fully earned, or any other Award made
pursuant to Section 10 subject to any vesting schedule or transfer
restriction, or who holds Common Shares subject to any transfer restriction
imposed pursuant to Section 12(b), the Committee may, in its sole
discretion, accelerate the time at which such Stock Option, SAR or other Award
may be exercised, the time at which such risk of forfeiture or prohibition or
restriction on transfer will lapse, the time when such Deferral Period will
end, the time at which such Performance Shares or Performance Units will be
deemed to have been fully earned or the time when such transfer restriction
will terminate, or may waive any other limitation or requirement under any such
Award.


 


(e)                                  The Committee
may, in its discretion, terminate the Plan at any time. Termination of the Plan
will not affect the rights of Participants or their successors under any Awards
outstanding hereunder and not exercised in full on the date of termination.


 


18.  Governing Law.  The Plan and all Awards and actions taken
thereunder will be governed by and construed in accordance with the internal
substantive laws of the State of Delaware.


 


19.  Term of Plan.  The Plan will be effective as of the
Effective Date. No Award will be made under the Plan more than 10 years
after the Effective Date, but all Awards made on or prior to such date will
continue in effect thereafter subject to the terms thereof and of the Plan.


 


20.  Miscellaneous Provisions.


 


(a)                                  The Company
will not be required to issue any fractional Common Shares pursuant to the
Plan. The Committee may provide for the elimination of fractions or for the
settlement of fractions in cash.


 


(b)                                 The Plan will
not confer upon any Participant any right with respect to continuance of
employment or other service with the Company or a Subsidiary, nor will it
interfere in any way with any right the Company or a Subsidiary would otherwise
have to terminate such Participant’s employment or other service at any time.
Except as specifically provided by the Committee, the Company will not be
liable for the loss of existing or potential profit with respect to an Award
hereunder in the event of termination of employment or other relationship, even
if the termination is in violation of an obligation of the Company or a
Subsidiary to the Participant. The Committee’s making of an Award to a
Participant hereunder will not confer upon the Participant any right to receive
any other Awards hereunder or under any other plan or arrangement.


 


14

















 


(c)                                  Any Evidence of
Award may provide for the effect on any Common Shares issued or other payment
made with respect to the Award of any conduct of the Participant determined by
the Committee to be injurious, detrimental or prejudicial to the Company or any
Subsidiary.


 


(d)                                 Notwithstanding
any other provision of the Plan or any Award to the contrary, no Award may be
effectuated, through exercise by the holder thereof or otherwise, if the
delivery of cash or stock to the holder of such Award pursuant to the terms
thereof would be, based on advice of counsel to the Company, contrary to law or
the regulations of any duly constituted authority having jurisdiction over the
Plan. Notwithstanding any other provision of the Plan to the contrary, each
issuance of Common Shares to a Participant pursuant to the Plan or an Award
will be made for such consideration as is required by applicable law to ensure
that such Common Shares are validly issued, fully paid and nonassessable upon
such issuance.


 


(e)                                  Absence on
leave approved by a duly constituted officer of the Company or a Subsidiary
will not be considered interruption or termination of service of any employee
for any purposes of the Plan or an Award, except that no Award may be made to
an employee while he or she is absent on leave.


 


(f)                                    No Participant
will have any rights as a stockholder with respect to any Common Shares subject
to an Award made to him or her under the Plan prior to the date as of which he
or she is actually recorded as the holder of such Common Shares upon the stock
records of the Company.


 


(g)                                 The Committee
may condition any Award or combination of Awards authorized under the Plan on
the surrender or deferral by the Participant of his or her right to receive a
cash bonus or other compensation otherwise payable by the Company or a
Subsidiary to the Participant.


 


(h)                                 If any
provision of the Plan is or becomes invalid, illegal or unenforceable in any
jurisdiction, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision will be construed or deemed amended
or limited in scope to conform to applicable laws or, in the discretion of the
Committee, will be stricken and the remainder of the Plan will remain in full
force and effect.


 


(i)                                     Each individual
who is or has been a member of the Board or a committee appointed by the Board
will be indemnified and held harmless by the Company against and from any loss,
cost, liability or expense that may be imposed upon or reasonably incurred by
him or her in connection with or resulting from any claim, action, suit or
proceeding to which he or she may be a party or in which he or she may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid in settlement thereof with the
Company’s approval, or paid in satisfaction of any judgment in any such action,
suit or proceeding against the individual, provided
the Company is given the opportunity, at its own expense, to handle and defend
such claim, action, suit or proceeding before the individual undertakes to
handle and defend such claim, action, suit or proceeding on his or her own
behalf, unless such loss, cost, liability or expense is a result of such
individual’s own willful misconduct or except as expressly provided by statute.
The foregoing right of indemnification will not be exclusive of any other
rights of indemnification to which such individuals may be entitled under the
Company’s Certificate of Incorporation or Bylaws, as a matter of law or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.


 


15